Dave Reid
Car Culture

$5 Deal?

By - Mar 27th, 2011 09:51 pm
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Gas Price in Milwaukee 3/10/2011

Gas Price in Milwaukee 3/10/2011

No, this isn’t an article about about the Subway lunch special, it’s about the price of gasoline.  The price of a gallon of gas is fast approaching $4, and recently experts have predict that a gallon of gas will go as high as $5 in 2012.  A range of factors have shocked the oil markets in recent years, be it speculators, war, hurricanes, peak oil, big oil, terrorists, revolution, QE1 or QE2, or simply supply and demand, but it is not the reason that is important to the individual filling up his tank.  It is the trend that matters, and that trend shows that the price is on the rise.

So the question that must be asked is how will the rise in price impact an individual’s bottom line and how can they control their exposure to this trend?  Clearly the more one drives the greater the impact, so a solution is to live where using driving isn’t needed just to buy a soda.

Take my girlfriend and me for example.  While the average U.S. citizen drives about 12,000 miles a year, we only drive a total of 3,000 miles per year.  Using an estimate of 22.4 mpg as how much gas a typical car uses per gallon and $3.53 (the price has risen since the photo was taken) as the average price for a gallon of gas in Milwaukee we spend about $3,700 less each year than a typical American couple.  If gas were to rise to $5 per gallon that difference will rise to $4,700 each year.  Of course not everyone can drop from 24,000 miles to 3,000 miles a year, but by living in a walkable neighborhood that has jobs and services close to housing the need to drive is dramatically reduced and the impact to the budget is minimized.

Certainly, there are other costs that can be higher or lower depending on where someone lives, and how big they live, but living in certain locations is sure to cost more at the pump.  Choosing to live in a built environment that allows people to get around without the requirement of an automobile allows people to avoid fluctuations in cost and have a fixed budget that is not susceptible to the whims of the oil market.

Categories: Car Culture

11 thoughts on “Car Culture: $5 Deal?”

  1. Jeff Jordan says:

    One of the reasons that we can reduce our gasoline consumption is that we have public transit options. Commuters in the near suburbs do not. Short term and antiquated thinking has put a number of people in the sad grips of the auto culture with no options.
    By the way, many people have commented that I must save a lot of money by using my Moped (another way to reduce auto use along with bicycles). I tell them that 70 -90 MPG does save money, but I actually save more money on parking than gasoline consumption

  2. Dave Reid says:

    @Jeff yes access to transit is important in reducing an individuals gasoline consumption. That said for me it really has been about where we live and having the amenities in walking/biking distance as so many of what would be driving trips have been replaced. And yes the savings on going car-free, beyond car-lite, are really significant (parking,insurance,maintenance,gas).

  3. Nick Aster says:

    What scares me most is how unbelievably resistant people are to accept this reality. Americans will KILL PEOPLE – very literally – if they think it will lower gas prices. We won’t even think twice when it comes to strip mining Alberta or North Dakota, or having another BP spill. It’s terribly, terribly sad.

    My only hope is that $4 dollars is just enough heat to drive change, but not yet enough to cause violence.

  4. Witt Dog says:

    $3.50 was the tipping point in 2008, where folks began riding the bus more. I am wondering if $3.50 is the tipping point in 2011, or what will it take?

    But it does seem, we are attempting to cut public services, including transit, across the board, to prioritize highway spending in WI. At what point will the current state government modify its behavior?

  5. Dave Reid says:

    @Witt Dog Normally, I like to be optimistic but I don’t see this Governor ever putting a priority on transit. Hopefully I’m wrong.

  6. Dave Reid says:

    @Nick Aster I’m not worried about violence, but I do fear $4 causing the economy to slump again

  7. Witt Dog says:

    @Dave I agree about the economy. Foreclosures and market crash could be on the agenda again.

  8. mke average joe says:

    This is a fantastic article and I 100% agree with its contents. Walkable neighborhoods will be increasing in value in direct proportion to the increase in gas. Unfortunately, many of Wisconsin residents do not want to live in walkable neighborhoods but desire to live in secluded areas far removed from any other humans. Also, funding continues to flow to large interstate construction rather than surface streets.

    In walkable neighborhoods, the creator of the smog has to breath the smog. In far away suburban sprawl developments, the smog is created on interstates surrounding the city but then the smog creator leaves the city and smog for others to breathe.

  9. Garrick Jannene says:

    The recent increase in gas price should be of surprise to no one.

    Remember before the recession started, gas was also this high. Now that the economy is returning to normal, gas prices are just picking up where they left off. It’s not that the problem went away, it’s just that the economic hardships forced the price to go down.

  10. Dave Reid says:

    @mke average joe There has been some recent reporting/studies on how people do actually want walkable communities, but our policies haven’t aligned with this issue.

  11. Dave Reid says:

    @Garrick Jannene Oh yeah clearly oil was going to rise as the economy got back on its feet, which it has, so it is even more unfortunate that we continue to advance policy that doesn’t take this new reality into consideration.

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